HBC's President Donald Watros laid out some of these plans at Columbia Business School’s 8th Annual Retail & Luxury Goods Conference on Friday. First, the company is utilizing the connections McKee developed at Harrods to secure more true luxury brands for Saks's 10 top performing stores. McKee has already brought in buzzy brands, like Alexander Wang and Balmain, to revitalize the retailer's ready-to-wear offerings.
Beyond that, Watros expressed a belief that the store's flagship is underperforming and tired. His goal is to turn it into the premiere shopping experience for North America, if not the world -- specifically, "the Harrods of New York." As reported previously, the company will spend $250 million to revitalize the overall experience at the store.
Saks is also expanding its outlet chain, a major moneymaker not just for Saks but for one of its main competitors, Nordstrom. In fact, Watros wasn't shy in admitting that he intends to copy Nordstrom Rack's concepts, calling Saks's Off Fifth stores "undermanaged."
"From a format standpoint, Nordstrom Rack works -- we overcomplicate it," he explained. "We're trying to run a fancy Saks store at an off-price format." That will change. The company intends to turn the Off Fifth concept like a true off-price store, adding locations outside the outlet center setting.
Watros called any concerns that the outlets cannibalize business from the parent stores "overstated." The only overlap between the two, he explained, are customers who cherry-pick from Saks Fifth Avenue sales but are otherwise loyal to the Off Fifth brand. "Our true core customer doesn't even know what an Off Fifth is," he said.
And HBC doesn't intend to stop at Saks -- the company has its eye on the U.S. retail luxury market as a whole. Despite the fact that Neiman Marcus (which also owns NYC landmark Bergdorf Goodman) was sold last fall, HBC still hopes to one day acquire the company. "We see tremendous value in controlling the luxury sector in North America," Watros said.
He's not worried about anti-trust laws, either. "Politically, I don't think anyone is going to go out on the line and make sure rich people don't get gouged on their Gucci," he joked, adding that lawyers have advised that not many lawyers would "stick their neck out" over the issue.